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(Credit: AFP/Getty Images via @daylife)

The market looked set for a long-awaited pullback Monday morning, after Europe's debt crisis flared anew in Cyprus over the weekend. But the selloff was short-lived and by noon the major averages were pushing to move out of the red and into positive territory.

set the pace, surging 9.6% after an analyst at ISI Group suggested the department store chain could convert several hundred of its best locations into a real estate investment trust. While ISI thinks the conversion could generate more than $1 billion in sublet income, it bears mentioning that , the REIT that invested in Penney alongside hedge fund manager Bill Ackman's Pershing Square, recently slashed its stake in the retailer. (See "Ackman Ally Backs Away From J.C. Penney.")

led the Dow's attempted foray into positive territory, up 2.7% after analysts at Morgan Stanley upgraded the stock to overweight and said rising free cash flow should enable more capital return to shareholders.

In afternoon trading the Dow was just 13 points lower at 14,501, compared with a triple-digit loss early in the session. The S&P 500 was down 4 points to 1,557 and the Nasdaq 4 points to 3,245.

shares got a reprieve from a recent downdraft, adding 4.5% on an upgrade from Canaccord Genuity. Analysts said a debate over the value of company's daVinci robotic surgery system for patients is drawing defenders as the FDA scrutinizes reports from critics.

On the downside Morgan Stanley was feeling the pinch from the Cyprus situation. The bank, whose European exposure has been a point of concern for shareholders over the past several years, fell 2.7% after the small country said it will tax bank deposits in order to gain bailout support from the Troika (the IMF, ECB and European Commission). Citigroup and Goldman Sachs were also among the laggards, off 1.8% and 1.7%, respectively.